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It's Nice To Have A Lot Of Money, But You Know, You Don't Want To Keep It Around Forever. I Prefer Buying Things. Otherwise, It's A Little Like Saving Sex For Your Old Age.

-Warren Buffett

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It's Nice To Have

Warren Buffett

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It's Nice To Have A Lot Of Money, But You Know, You Don't Want To Keep It Around Forever. I Prefer Buying Things. Otherwise, It's A Little Like Saving Sex For Your Old Age.

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I'm Always Interested In Understanding The Math Of Things And Understanding As Much As I Can About All Aspects Of Business. And What I Learn Today May Be Useful To Me Two Years From Now. That's Really The Wonderful Thing About Investments Is Your Knowledge Is Cumulative.

They [goverment] Take From The Woman Who Comes In And Takes The Wastebaskets Out.

The Advice "you Never Go Broke Taking A Profit" Is Foolish.

I Was Lucky To Have The Right Heroes. Tell Me Who Your Heroes Are And I'll Tell You How You'll Turn Out To Be. The Qualities Of The One You Admire Are The Traits That You, With A Little Practice, Can Make Your Own, And That, If Practiced, Will Become Habit Forming.

The Active Investors Will Have Their Returns Diminished By A Far Greater Percentage Than Will Their Inactive Brethren. That Means That The Passive Group - The "know-nothings" - Must Win.

I Have No Views As To Where It Will Be, But The One Thing I Can Tell You Is It Won't Do Anything Between Now And Then Except Look At You. Whereas, You Know, Coca-cola (ko) Will Be Making Money, And I Think Wells Fargo (wfc) Will Be Making A Lot Of Money And There Will Be A Lot - And It's A Lot - It's A Lot Better To Have A Goose That Keeps Laying Eggs Than A Goose That Just Sits There And Eats Insurance And Storage And A Few Things Like That.

The Investor Of Today Does Not Profit From Yesterday's Growth.

Investing Money

We Also Believe Candour Benefits Us As Managers. The Ceo Who Misleads Often In Public Eventually Misleads Himself In Private.

An Investor Needs To Do Very Few Things Right As Long As He Or She Avoids Big Mistakes.

Anything Can Happen Anytime In Markets. And No Advisor, Economist, Or Tv Commentator-and Definitely Not Charlie Nor I-can Tell You When Chaos Will Occur. Market Forecasters Will Fill Your Ear But Will Never Fill Your Wallet.

I Understand Goldman Sachs Businesses. We Do Lot Of Business With Him, And Ge Has Been - I Think It's The Longest Running Stock In The Dow Jones Industrial Average. It Will Be 100 Years Now It Will Be Around. I Hope I'm Around Then, Too. And It Was An Attractive Investment. And We Have Had A Lot Of Money Around, Over The Last Two Years, And We're Seeing Things That Are Attractive Now.

What Motivates Most Gold Purchasers Is Their Belief That The Ranks Of The Fearful Will Grow. During The Past Decade That Belief Has Proved Correct. Beyond That, The Rising Price Has On Its Own Generated Additional Buying Enthusiasm, Attracting Purchasers Who See The Rise As Validating An Investment Thesis. As 'bandwagon' Investors Join Any Party, They Create Their Own Truth - For A While.

The True Investor Welcomes Volatility ... A Wildly Fluctuating Market Means That Irrationally Low Prices Will Periodically Be Attached To Solid Businesses.

Asking For Financial Advice From A Financial Planner Is Like Asking A Barber If You Need A Hair Cut.

When You Build A Bridge, You Insist That It Can Carry 30,000 Pounds, But You Only Drive 10,000-pound Trucks Across It. And That Same Principle Works In Investing.

There's Always A Mismatch. I Mean, You Know, As The Economy Evolves, It Reallocates Resources. Now, The Real Problem, In My View, Is - This Has Been - The Prosperity Has Been Unbelievable For The Extremely Rich People. If You Go To 1982, When Forbes Put On Their First 400 List, Those People Had $93 Billion. They Now They Have $2.4 Trillion, 25 For One. That Is - This Has Been A Prosperity That's Been Disproportionately Rewarding To The People On Top.

The U.s. Treasury Has Got Borrowing Costs Like Nobody Else Has.

Charlie [munger] And I Are Not Big Fans Of Resumes. Instead, We Focus On Brains, Passion And Integrity.

I Think You Are Out Of Your Mind If You Keep Taking Jobs That You Don't Like Because You Think It Will Look Good On Your Resume. Isn't That A Little Like Saving Up Sex For Your Old Age?

Diversification Is Protection Against Ignorance. It Makes Little Sense If You Know What You Are Doing.

A Pack Of Lemmings Looks Like A Group Of Rugged Individualists Compared With Wall Street When It Gets A Concept In Its Teeth.

What's Nice About Investing Is You Don't Have To Swing At Every Pitch.

An Investor Will Succeed By Coupling Good Business Judgment With An Ability To Insulate His Thoughts And Behavior From The Super-contagious Emotions That Swirl About The Marketplace.

Everybody's Got A Different Circle Of Competence. The Important Thing Is Not How Big The Circle Is. The Important Thing Is Staying Inside The Circle.

When Bills Come Due, Only Cash Is Legal Tender. Don't Leave Home Without It.

I Don't Need 15 Houses. Owning Real Estate Doesn't Mean Much To Me. I Don't Like To Think About Things Like That. I Don't Need 12 Boats, Or Even The World's Largest Boat With A Crew Of 80. I'd Have To Take Care Of Them, To Worry About Them. I Get A Lot More Fun Out Of Life Without All The Bells And Whistles.

Diversification May Preserve Wealth, But Concentration Builds Wealth.

Concentration Of Wealth

An Investor Should Ordinarily Hold A Small Piece Of An Outstanding Business With The Same Tenacity That An Owner Would Exhibit If He Owned All Of That Business.

I Have Got This Letter Which Actually Goes Out The Day After I Die. It Has Already Been Written. And It Says That: "yesterday I Died". And Then It Says: "that's Bad News For Me, But It's Not Bad News For You, The Shareholders Of Berkshire". And Then I Go On And Explain What Is Going To Happen. I Know That Is One Time When They Will Be Really Interested In Hearing From Me.

I Learned To Go Into Business Only With People Whom I Like, Trust, And Admire.

The 19th Century Belonged To England, The 20th Century Belonged To The U.s., And The 21st Century Belongs To China. Invest Accordingly.

You Don't Need To Be A Rocket Scientist. Investing Is Not A Game Where The Guy With The 160 Iq Beats The Guy With 130 Iq.

Investment Success

It Makes No Difference To A Widow With Her Savings In A 5 Percent Passbook Account Whether She Pays 100 Percent Income Tax On Her Interest Income During A Period Of Zero Inflation Or Pays No Income Tax During Years Of 5 Percent Inflation. Either Way, She Is 'taxed' In A Manner That Leaves Her No Real Income Whatsoever. Any Money She Spends Comes Right Out Of Capital. She Would Find Outrageous A 100 Percent Income Tax But Doesn't Seem To Notice That 5 Percent Inflation Is The Economic Equivalent.

I Bought My First Stock In 1942, In The Summer Of '42. I Was 11 Years Old. And So 75 Years Have Gone By. And I Have Never Known What The Market's Going To Do The Next Day. And That's Not My Game. My Game Is To Decide Whether I'm In The Right Economy, Which America's Definitely Been Ever Since That Time. The Dow Has Gone From 100 To 21,000 During That Time. And No Matter What The Headlines Say, Or Terrible Things Are Happening - We Were Losing The War In The Pacific When I First Bought Stocks.

The Banking Business Is No Favorite Of Ours. When Assets Are Twenty Times Equity - A Common Ratio In This Industry - Mistakes That Involve Only A Small Portion Of Assets Can Destroy A Major Portion Of Equity. And Mistakes Have Been The Rule Rather Than The Exception At Many Major Banks.

The Patient That's On The Floor With The Cardiac Arrest Is Not Wall Street. It's The American Economy.

Over The Years, Charlie [munger, Berkshire Hathaway Vice Chairman] And I Have Observed Many Accounting-based Frauds Of Staggering Size. Few Of The Perpetrators Have Been Punished; Many Have Not Even Been Censured. It Has Been Far Safer To Steal Large Sums With Pen Than Small Sums With A Gun.

Charlie And I Have A Number Of Filters That Things Have To Get Through Before We'll Think About Them.

The Thing To Do Is To Keep Your Mind When The World Around You Is Losing Theirs.

As Far As You Are Concerned, The Stock Market Does Not Exist. Ignore It.

Honesty Is A Very Expensive Gift, Don't Expect It From Cheap People.

In Business, I Look For Economic Castles Protected By Unbreachable 'moats'.

At Berkshire, I Both Initiate And Monitor Every Derivatives Contract On Our Books ... If Berkshire Ever Gets In Trouble, It Will Be My Fault. It Will Not Be Because Of The Misjudgments Made By A Risk Committee Or Chief Risk Officer.

The Smartest Side To Take In A Bidding War Is The Losing Side.

Never Invest In A Business You Don't Understand.

What We Really Want To Do Is Buy Businesses That We Would Be Happy To Own Forever.

Observing That The Market Was Frequently Efficient, Emt Adherents Went On To Conclude Incorrectly That It Was Always Efficient. The Difference Between These Propositions Is Night And Day.

I Do Not Believe In Inheriting Your Position In Society Based On Which Womb You Come From... I Think A Rich Person Should Leave His Children Enough So They Can Do Anything, But Not Enough So They Can Do Nothing.

Take The Job You Would Take If You Were Independently Wealthy. You're Going To Do Well At It.

I Have Worked With Investors For 60 Years And I Have Yet To See Anyone - Not Even When Capital Gains Rates Were 39.9 Percent In 1976-77 - Shy Away From A Sensible Investment Because Of The Tax Rate On The Potential Gain.

The Truth Is, Everything That Has Happened In My Life... That I Thought Was A Crushing Event At The Time, Has Turned Out For The Better.

If You're An Investor, You're Looking On What The Asset Is Going To Do, If You're A Speculator, You're Commonly Focusing On What The Price Of The Object Is Going To Do, And That's Not Our Game.

As I Have Mentioned Before, We Cannot Make The Same Sort Of Money Out Of Permanent Ownership Of Controlled Businesses That Can Be Made From Buying And Reselling Such Businesses, Or From Skilled Investment In Marketable Securities. Nevertheless, They Offer A Pleasant Long Term Form Of Activity (when Conducted In Conjunction With High Grade, Able People) At Satisfactory Rates Of Return.

With A Wonderful Business, You Can Figure Out What Will Happen; You Can't Figure Out When It Will Happen. You Don't Want To Focus On When, You Want To Focus On What. If You're Right About What, You Don't Have To Worry About When

With Housing It's Something Even More Dramatic Than That, Because Most People Aspire To Own Their Own Home.if You Really Think That Houses Prices Are Going To Go Up Next Year And The Year After, You Feel If I Don't Buy It This Year, I'm Going To Have To Buy It Next Year.that's Not True Of An Internet Stock. But It's True Of A Home.

Intrinsic Value Can Be Defined Simply: It Is The Discounted Value Of The Cash That Can Be Taken Out Of A Business During Its Remaining Life. The Calculation Of Intrinsic Value, Though, Is Not So Simple. As Our Definition Suggests, Intrinsic Value Is An Estimate Rather Than A Precise Figure, And It Is Additionally An Estimate That Must Be Changed If Interest Rates Move Or Forecasts Of Future Cash Flows Are Revised.

Life Is Like A Snowball. The Important Thing Is Finding Wet Snow And A Really Long Hill.

Occasionally, A Man Must Rise Above Principles.

Rule No.1: Never Lose Money. Rule No.2: Never Forget Rule No.1.

Is Management Candid With The Shareholders?

We Really Can Say No In 10 Seconds Or So To 90%+ Of All The Things That Come Along Simply Because We Have These Filters.

In The Business World, The Rearview Mirror Is Always Clearer Than The Windshield.

It Takes 20 Years To Build A Reputation And Five Minutes To Ruin It. If You Think About That, You'll Do Things Differently.

Never Risk What You Have And Need For What We Don't Have And Don't Need.

I Have No Idea On Timing. It’s Easier To Tell What Will Happen Than When It Will Happen. I Would Say That What Is Going On In Terms Of Trade Policy Is Going To Have Very Important Consequences.

I Don't Want To Be On The Other Side Of The Table From The Customer. I Was Never Selling Anything That I Didn't Believe In Myself Or Use Myself.

Does Management Resist The Institutional Imperative?

An Ipo Is Like A Negotiated Transaction - The Seller Chooses When To Come Public - And It's Unlikely To Be A Time That's Favourable To You.

A Lot Of People Disagree With Me On This, I Believe In Mark To Market.

Our Stay-put Behavior Reflects Our View That The Stock Market Serves As A Relocation Center At Which Money Is Moved From The Active To The Patient.

I Mean There Is No Capital Requirements To It Or Anything Of The Sort. And Basically, I Said There Were Possibly Financial Weapons Of Mass Destruction, And They Had Them. They Destroyed Aig. They Certainly Contributed To The Destruction Of Bear Sterns And Lehman. Although Lehman Had Other Problems, Too.

Mass Destruction

If You Want To Shoot Rare, Fast-moving Elephants, You Should Always Carry A Loaded Gun.

Stop Trying To Predict The Direction Of The Stock Market, The Economy Or Elections.

A Contrarian Approach Is Just As Foolish As A Follow-the-crowd Strategy. What's Required Is Thinking Rather Than Polling.

The Best Investment You Can Make, Is An Investment In Yourself... The More You Learn, The More You'll Earn.

Best Investment

People Do, As Long As You Have Markets, You'll Have Excesses.

I Mean, We'll Be Pounding On The Guy's Chest, You Know, On The Floor, And You Know, He's Not Going To Just Jump Up All Of A Sudden. So It Makes It Tough. I Mean, It's Tough To Be In The Legislature, You Know, And Vote For Something And Then People Say, Well, You Voted All This Money And You Know, It's All Getting Spent. It Isn't Getting Spent. It's Getting Invested. But It's All Getting Spent. Nothing's Happening.

If You Can Eliminate The Government As A 39.6% Partner, Then You Will Be Much Better Off.

The Only Way To Get Love Is To Be Lovable. It's Very Irritating If You Have A Lot Of Money. You'd Like To Think You Could Write A Check: "i'll Buy A Million Dollars' Worth Of Love." But It Doesn't Work That Way. The More You Give Love Away, The More You Get.

We Like To Buy Businesses, But We Don't Like To Sell Them.

If You Own The Only Newspaper In Town, Up Until The Last Five Years Or So, You Have Pricing Power And You Didn't Have To Go To The Office.

I Certainly Do Believe Anyone Engaged In The Management Of Money Should Have A Standard Of Measurement, And That Both He And The Party Whose Money Is Managed Should Have A Clear Understanding Why It Is The Appropriate Standard, What Time Period Should Be Utilized, Etc.

Investment Students Need Only Two Well-taught Courses - How To Value A Business And How To Think About Market Prices

It's Just That I Landed Up In A Terrific Capitalist System. One That Pays People Who Allocate Capital Extraordinarily Well. Intrinsically, I'm Not Worth As Much As Somebody Who Invents Something That Could Improves People's Life, Or Health Or Whatever.

Only When The Tide Goes Out Do You Discover Who's Been Swimming Naked.

Returns Decrease As Motion Increases.

Calculate "owner Earnings" To Get A True Reflection Of Value.

It Makes A Difference Who The Treasury Secretary Is.

Making A Difference

In The 20th Century, The United States Endured Two World Wars And Other Traumatic And Expensive Military Conflicts; The Depression; A Dozen Or So Recessions And Financial Panics; Oil Shocks; A Flu Epidemic; And The Resignation Of A Disgraced President. Yet The Dow Rose From 66 To 11,497.

I Put Heavy Weight On Certainty. It's Not Risky To Buy Securities At A Fraction Of What They're Worth.

I'd Rather Have A $10 Million Business Making 15 Per Cent Than A $100 Million Business Making 5 Per Cent.

Most Business Mistakes Are Irreversible Setbacks, But You Get Another Chance. There Are Two Things In Life That You Don't Get Another Chance At - Marrying The Wrong Person And What You Do With Your Children.

It's Far Better To Buy A Wonderful Company At A Fair Price Than A Fair Company At A Wonderful Price.

Investing Money

Only Those Who Will Be Sellers Of Equities In The Near Future Should Be Happy At Seeing Stocks Rise. Prospective Purchasers Should Much Prefer Sinking Prices.

Accounting Consequences Do Not Influence Our Operating Or Capital-allocation Decisions. When Acquisition Costs Are Similar, We Much Prefer To Purchase $2 Of Earnings That Is Not Reportable By Us Under Standard Accounting Principles Than To Purchase $1 Of Earnings That Is Reportable.

The Difference Between Successful People And Really Successful People Is That Really Successful People Say No To Almost Everything.

I Think The Congress Will Do The Right Thing. I Think That They've - You Know, They Got Into Certain Arguments And They Start Worrying About Assessing Blame, And There Is A Little Demagoguery, But In The End, Something This Important, They'll Do The Right Thing. So This Really Is An Economic Pearl Harbor. That Sounds Melodramatic, But I've Never Used That Phrase Before. And This Really Is One.

Invest In As Much Of Yourself As You Can, You Are Your Own Biggest Asset By Far.

Risk Comes From Not Knowing What You Are Doing So Wide Diversification Is Only Required When Investors Are Ignorant. You Only Have To Do A Very Few Things In Your Life So Long As You Don't Do Too Many Things Wrong.

Equities Will Do Well Over Time - You Just Have To Avoid Getting Excited When Other People Are Getting Excited.

Buy A Cross Section Of American Industry, And If A Cross Section Of American Industry Doesn't Work, Certainly Trying To Pick The Little Beauties Here And There Isn't Going To Work Either.

A Bull Market Is Like Sex. It Feels Best Just Before It Ends.

A Prediction About The Direction Of The Stock Market Tells You Nothing About Where Stocks Are Headed, But A Whole Lot About The Person Doing The Predicting.

I'm Putting All My Money In The Chinese Toy Market.

I Have Never Been Able To Understand Why The Tax Comes As Such A Body Blow To Many People Since The Rate On Long-term Capital Gain Is Lower Than On Most Likes Of Endeavor (tax Policy Indicated Digging Ditches Is Regarded As Socially Less Desirable Than Shuffling Stock Certificates).

The Reaction Of Weak Management To Weak Operations Is Often Weak Accounting.

The Idea That You Try To Time Purchases Based On What You Think Business Is Going To Do In The Next Year Or Two, I Think That's The Greatest Mistake That Investors Make Because It's Always Uncertain. People Say It's A Time Of Uncertainty. It Was Uncertain On September 10th, 2001, People Just Didn't Know It. It's Uncertain Every Single Day. So Take Uncertainty As Part Of Being Involved In Investment At All. But Uncertainty Can Be Your Friend. I Mean, When People Are Scared, They Pay Less For Things. We Try To Price. We Don't Try To Time At All.

Trust Is Like The Air We Breathe--when It's Present, Nobody Really Notices; When It's Absent, Everybody Notices.

The Smarter The Journalists Are, The Better Off Society Is.

To Invest Successfully, You Need Not Understand Beta, Efficient Markets, Modern Portfolio Theory, Option Pricing Or Emerging Markets. You May, In Fact, Be Better Off Knowing Nothing Of These. That, Of Course, Is Not The Prevailing View At Most Business Schools, Whose Finance Curriculum Tends To Be Dominated By Such Subjects. In Our View, Though, Investment Students Need Only Two Well-taught Courses - How To Value A Business, And How To Think About Market Prices.

We're Paying Maybe 25 Percent Of The Income Tax, But The Payroll Tax Is Over A Third Of The Receipts Of The Federal Government. And They Don't Take That From Me On Capital Gains. They Don't Take That From Me On Dividends.

Investors Should Remember That Excitement And Expenses Are Their Enemies.

Investing Money

Investment Success

You Are Neither Right Nor Wrong Because The Crowd Disagrees With You.

Do Not Take Yearly Results Too Seriously. Instead, Focus On Four Or Five-year Averages.

We Say We Are Trying To Buy Into Businesses With Excellent Economics, Run By Honest And Able People At A Decent Price. We Buy Very Few Securities, So We Look At It As "focused" Investing.

First Come The Innovators, Then Come The Imitators, Then Come The Idiots.

I Always Knew I Was Going To Be Rich. I Don't Think I Ever Doubted It For A Minute.

You Can't Help Some Increase From This Point. I Don't Want Any Viewer To Go Away Think A Magic Wand Exists In Congress. So They're Going To See Some More Bad News. But If We Do This, We're Doing The Right Thing.

The Key To Life Is To Figure Out Who To Be The Batboy For.

People Should Always Know Better.

In An Inflationary World, A Toll Bridge (like Company) Would Be A Great Thing To Own Because You've Laid Out The Capital Costs. You Built It In Old Dollars And You Don't Have To Keep Replacing It.

Shares Are Not Mere Pieces Of Paper. They Represent Part Ownership Of A Business. So, When Contemplating An Investment, Think Like A Prospective Owner.

Sound Investing Can Make You Very Wealthy If You're Not In Too Big A Hurry

I Did Not Think I Would See The Day When, You Know, An Aig Would Not Be Able To Have Its Checks Clear.

Money To Some Extent Sometimes Let You Be In More Interesting Environments. But It Can't Change How Many People Love You Or How Healthy You Are.

The First Rule Is Not To Lose. The Second Rule Is Not To Forget The First Rule.

We Do Not Have, Nor Have Had, And Never Will Have An Opinion About Where The Stock Market, Interest Rates, Or Business Activity Will Be A Year From Now.

Read Ben Graham And Phil Fisher Read Annual Reports, But Don't Do Equations With Greek Letters In Them.

Confidence In Markets And In Institutions, It's A Lot Like Oxygen. When You Have It, You Don't Even Think About It. It's Indispensable. You Can Go Years Without Thinking About It. When It's Gone For Five Minutes, It's The Only Thing To Think About.

You Don't Want 300 Million Americans Putting Their Money Under The Mattress.

Only When You Combine Sound Intellect With Emotional Discipline Do You Get Rational Behavior.

Anything Can Happen In Stock Markets And You Ought To Conduct Your Affairs So That If The Most Extraordinary Events Happen, That You're Still Around To Play The Next Day.

Investing Is Laying Out Money Now To Get More Money Back In The Future.

More Investment Sins Are Probably Committed By Otherwise Quite Intelligent People Because Of "tax Considerations" Than From Any Other Cause. One Of My Friends-a Noted West Coast Philosopher-maintains That A Majority Of Life's Errors Are Caused By Forgetting What One Is Really Trying To Do. This Is Certainly The Case When An Emotionally Supercharged Element Like Taxes Enters The Picture (i Have Another Friend-a Noted East Coast Philosopher Who Says It Isn't The Lack Of Representation He Minds-it's The Taxation).

The Only Time To Buy These Is On A Day With No 'y' In It.

I Would Say It's More Important Who The Treasury Secretary Is Than Who The Vice President Is. If You Want To Have A Debate Here, I'd Like A Debate Between Potential Treasury Secretaries Than The Vice Presidential Debate.

I Mean [franklin Delano] Roosevelt Didn't - You Know, When He Came In, He Didn't Print Any Money.

Franklin Delano Roosevelt

The Rest Of The World Really Likes Our Stuff Pretty Well. It's Just We Buy So Damn Much Of What They Produce.

House Prices Just Soared Beyond - Beyond Reason In Many Places And They Got Financed In Silly Ways, And People Lied About Loans, All Kinds Of Accesses Entered Into It. But That Is What - That Is The Single Biggest Cause Of Why We're Here.

But, Surprise - None Of These Blockbuster Events Made The Slightest Dent In Ben Graham's Investment Principles. Nor Did They Render Unsound The Negotiated Purchases Of Fine Businesses At Sensible Prices. Imagine The Cost To Us, Then, If We Had Let A Fear Of Unknowns Cause Us To Defer Or Alter The Deployment Of Capital. Indeed, We Have Usually Made Our Best Purchases When Apprehensions About Some Macro Event Were At A Peak. Fear Is The Foe Of The Faddist, But The Friend Of The Fundamentalist.

You Don't Need To Have Extraordinary Effort To Achieve Extraordinary Results. You Just Need To Do The Ordinary, Everyday Things Exceptionally Well.

Everyday Things

It Is Madness To Risk Losing What You Need In Pursuing What You Simply Desire.

Government Can't Deliver A Free Lunch To The Country As A Whole. It Can, However, Determine Who Pays For Lunch. And Last Week The Senate Handed The Bill To The Wrong Party... The Poor And Middle Class.

If You Don't Know Jewelry, Know The Jeweler.

You're Dealing With A Lot Of Silly People In The Marketplace; It's Like A Great Big Casino And Everyone Else Is Boozing. If You Can Stick With Pepsi, You Should Be Ok.

Investing Money

Our Future Rates Of Gain Will Fall Far Short Of Those Achieved In The Past. Berkshire's Capital Base Is Now Simply Too Large To Allow Us To Earn Truly Outsized Returns. If You Believe Otherwise, You Should Consider A Career In Sales But Avoid One In Mathematics.

We've Long Felt That The Only Value Of Stock Forecasters Is To Make Fortune Tellers Look Good. Even Now, Charlie And I Continue To Believe That Short-term Market Forecasts Are Poison And Should Be Kept Locked Up In A Safe Place, Away From Children And Also From Grown-ups Who Behave In The Market Like Children.

Larger Sums May Be An Advantage At Some Cases And A Disadvantage At Others.

Remember That The Stock Market Is Manic-depressive.

I'm Not Worried They're All About The Investments We Make. I Mean, Listen, This Country - We've Got $46,000 Or $47,000 Of Gdp Per Capita. Now, We've Done Pretty Darn Well. We'll Do Better In The Future.

Take The Probability Of Loss Times The Amount Of Possible Loss From The Probability Of Gain Times The Amount Of Possible Gain. That Is What We're Trying To Do. It's Imperfect, But That's What It's All About.

In Our View, Though, Investment Students Need Only Two Well-taught Courses-how To Value A Business, And How To Think About Market Prices. Your Goal As An Investor Should Simply Be To Purchase, At A Rational Price, A Part Interest In An Easily-understandable Business Who's Earnings Are Virtually Certain To Be Materially Higher Five, Ten And Twenty Years From Now.

If You Know How To Value Businesses, It's Crazy To Own 50 Stocks Or 40 Stocks Or 30 Stocks, Probably Because There Aren't That Many Wonderful Businesses Understandable To A Single Human Being In All Likelihood. To Forego Buying More Of Some Super-wonderful Business And Instead Put Your Money Into #30 Or #35 On Your List Of Attractiveness Just Strikes Charlie And Me As Madness.

Buy Companies With Strong Histories Of Profitability And With A Dominant Business Franchise.

Traditional Wisdom Is Long On Tradition And Short On Wisdom.

You Get What I Call The Natural Progression, The Three Is. The Innovators, The Imitators, And The Idiots.

You're Neither Right Nor Wrong Because Other People Agree With You. You're Right Because Your Facts Are Right And Your Reasoning Is Right - That's The Only Thing That Makes You Right. And If Your Facts And Reasoning Are Right, You Don't Have To Worry About Anybody Else.

[people] Have Seen The Credit Market Seize Up. They're Worried About Money Market Funds, Although The Latest Proposition From Government Should Take Care Of That. They've Seen Eight Percent Of The Bank Deposits In The United States Get Moved Very Skillfully, I Might Say, Within The Last Couple Of Weeks From Institutions That They Thought Were Fine A Few Months Ago To Other Institutions. They Are Not Wrong To Be Worried.

John Maynard Keynes Essentially Said, Don't Try And Figure Out What The Market Is Doing. Figure Out A Business You Understand, And Concentrate.

It Is Obvious That The Performance Of A Stock Last Year Or Last Month Is No Reason, Per Se, To Either Own It Or To Not Own It Now. It Is Obvious That An Inability To "get Even" In A Security That Has Declined Is Of No Importance. It Is Obvious That The Inner Warm Glow That Results From Having Held A Winner Last Year Is Of No Importance In Making A Decision As To Whether It Belongs In An Optimum Portfolio This Year.

Gold Has Two Significant Shortcomings, Being Neither Of Much Use Nor Procreative.

If I Got A Chance To Take One Percent Of The Deal Either Way, I Would Make That Bet.

It's Easy To Identify Many Investment Managers With Great Recent Records. But Past Results, Though Important, Do Not Suffice When Prospective Performance Is Being Judged. How The Record Has Been Achieved Is Crucial.

If You Aren't Willing To Own A Stock For Ten Years, Don't Even Think About Owning It For Ten Minutes. Put Together A Portfolio Of Companies Whose Aggregate Earnings March Upward Over The Years, And So Also Will The Portfolio's Market Value.

Don't Invest In Pieces Of Papers (stocks), Invest In Great Businesses Underlying Them

You Can't Buy What Is Popular And Do Well.

Would Your Reply Possibly Be This? Well, It All Depends On What My Tax Rate Will Be On The Gain You're Saying We're Going To Make. If The Taxes Are Too High, I Would Rather Leave The Money In My Savings Account, Earning A Quarter Of 1 Percent. Only In Grover Norquist's Imagination Does Such A Response Exist.

Benign Neglect, Bordering On Sloth, Remains The Hallmark Of Our Investment Process.

You Should Look At Stocks As Small Pieces Of Business.

People Went Crazy With Tulip Bulbs. They Went Crazy With The South Sea Bubble, They Went Crazy Internet Stocks, They Went Crazy With The Uranium Stocks Back When I Was First Getting Started.

That Goes Back To 1932, Although It Was Really Implemented In '33 Under Jesse Jones, And It Invested In Mostly Banks Initially And Preferred Stock And That Sort Of Thing. So There Are Two Things Needed In The System, The One That's Needed Overwhelmingly Is Liquidity. I Mean, When People Are Trying To [unintelligible], There Has To Be Somebody There To Buy.

Market Prices For Stocks Fluctuate At Great Amplitudes Around Intrinsic Value But, Over The Long Term, Intrinsic Value Is Virtually Always Reflected At Some Point In Market Price.

Intrinsic Value

We All Make Mistakes. If You Can't Make Mistakes, You Can't Make Decisions. I've Made A Lot Bigger Mistakes Myself.

It's A Nightmare To Administer Some Of This Sort Of Thing, But I Want To Tell The Shareholders Of Berkshire, To The Percent We Own Marketable Securities Or Things For Which There Are Market, Even If Those Markets - I Want To Tell Them What It's All About.

The Woman That Comes In, Takes The Wastebasket Away, She's Paying 15.3 Or Whatever It Is On Payroll Tax Alone. I Mean It Is - I Never Had It So Good.

Managers That Always Promise To 'make The Numbers' Will At Some Point Be Tempted To Make Up The Numbers.

Forecasts May Tell You A Great Deal About The Forecaster; They Tell You Nothing About The Future.

People Will Always Try To Stop You From Doing The Right Thing If It Is Unconventional.

The Smarter The Journalists Are, The Better Off Society Is. For To A Degree, People Read The Press To Inform Themselves - And The Better The Teacher, The Better The Student Body.

I Tell College Students, When You Get To Be My Age You Will Be Successful If The People Who You Hope To Have Love You, Do Love You.

Knowing The Edge Of Your Competency Is Important. If You Think You Know More Than You Do, You Will Get In Trouble.

Your Premium Brand Had Better Be Delivering Something Special, Or It's Not Going To Get The Business.

We Will Prosper Or Suffer In Controlled Investments In Relation To The Operating Performances Of Our Businesses - We Will Not Attempt To Profit By Playing Various Games In The Securities Markets.

This Country Is Going - Be Living Better Ten Years From Now Than It Is Now. It Will Be Living Better In 20 Years From Now Than Ten Years From Now. The Ingredients That Made This Country, You Know, The Miracle Of The World - I Mean We Had A Seven For One Improvement In The Average American Standard Of Living In The 20th Century.

We Would Do Best In A Market Where Everyone Acted Foolishly.

When You're Associating With The People That You Love, Doing What You Love, It Doesn't Get Any Better Than That.

Doing What You Love

I Don't Really Think That, As A Society, We [americans] Want To Confer Blessings On Generation After Generation Who Contribute Nothing To Society, Simply Because Somebody In The Far Distant Past Happened To Amass A Great Sum Of Wealth.

Look At Market Fluctuations As Your Friend Rather Than Your Enemy; Profit From Folly Rather Than Participate In It.

Investment Success

If You Are A Professional And Have Confidence, Then I Would Advocate Lots Of Concentration.

Have Confidence

When The Brothel Burns Down, Even The Pretty Girls Have To Run Out.

If Book Knowledge Made Great Investors, Than The Librarians Would All Be Rich.

We Will Reject Interesting Opportunities Rather Than Over-leverage Our Balance Sheet.

What's Hot Today Isn't Likely To Be Hot Tomorrow. The Stock Market Reverts To Fundamental Returns Over The Long Run. Don't Follow The Herd.

Paradoxically, When 'dumb' Money Acknowledges Its Limitations, It Ceases To Be Dumb.

We Don't Have To Be Smarter Than The Rest. We Have To Be More Disciplined Than The Rest.

Successful Investing

If We Have A Strength, It Is In Recognizing When We Are Operating Well Within Our Circle Of Competence And When We Are Approaching The Perimeter.

I Really Like My Life. I've Arranged My Life So That I Can Do What I Want.

Investment Philosophy Is The Clear Understanding That By Owning Shares Of Stocks He Owns Businesses, Not Pieces Of Paper.

I Prefer Liquor Store Robbers With Hungry Kids To Companies That Locate Offshore To Avoid U.s. Taxes.

On His Giving Pledge Philanthropy: The Way I Got The Message Out Was To Get A Copy Of Forbes, Look Down That 400 List And Start Making Phone Calls! Bill And Melinda [gates] Did The Same Thing. So Keep Publishing The List So I Can Milk It.

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